The Audit Committee pre-approves all audit and permissible non-audit services to be provided by the independent registered public accounting firm and the estimated fees for these
services in connection with its annual review of its charter. Pre-approval may be granted by action of the full Audit Committee or by delegated authority to one or more members of the Audit Committee. If this authority is delegated, all approved
non-audit services will be presented to the Audit Committee at its next meeting for ratification. In considering non-audit services, the Audit Committee or its delegate will consider various factors, including but not limited to, whether it would be
beneficial to have the service provided by the independent registered public accounting firm and whether the service could compromise the independence of the independent registered public accounting firm. All of the services provided by Delap LLP
described above were approved by the Audit Committee.
Section 16(a) of the Securities Exchange Act requires our executive officers and directors, and persons who own more than 10% of any registered class of Timberland’s equity
securities, to file reports of ownership and changes in ownership with the SEC. Executive officers, directors and greater than 10% shareholders are required by regulation to furnish us with copies of all Section 16(a) forms they file. Based solely
on our review of the copies of such forms we have received and written representations provided to us by the above-referenced persons, we believe that, during the fiscal year ended September 30, 2019, all filing requirements applicable to our
reporting officers, directors and greater than 10% shareholders were properly and timely complied with, with the exception of a Form 4 covering one transaction that was inadvertently filed three days late by Officer Edward C. Foster.
The Board of Directors is not aware of any business to come before the annual meeting other than those matters described in this Proxy Statement. However, if any other matters
should properly come before the meeting, it is intended that proxies in the accompanying form will be voted in respect thereof in accordance with the judgment of the person or persons voting the proxies.
We will pay the cost of soliciting proxies. In addition to this mailing, our directors, officers and employees may also solicit proxies personally, electronically or by
telephone without additional compensation. In addition, we have engaged Broadridge to assist in distributing proxy materials and contacting record and beneficial owners of our common stock. We have agreed to pay a fee of $3,500, plus out-of-pocket
expenses in certain instances, for these services. We
will also reimburse brokers and other nominees for their expenses in sending these materials to you and obtaining your voting instructions.
Our annual report to shareholders, including financial statements, will be mailed on or about December 18, 2019 to all shareholders of record as of the close of business on the
record date. Any shareholder who has not received a copy of the annual report may obtain a copy by writing to the Corporate Secretary, Timberland Bancorp, Inc., 624 Simpson Avenue, Hoquiam, Washington 98550. The annual report is not to be
considered as part of the proxy solicitation material or as having been incorporated herein by reference. In addition, a copy our Annual Report on Form 10-K for the fiscal year ended September 30, 2019 is available to each record and beneficial
owner of Timberland’s common stock without charge upon written request to the Corporate Secretary at the address given above.
Proposals of shareholders intended to be presented at next year’s annual meeting of shareholders must be received at the executive office at 624 Simpson Avenue, Hoquiam,
Washington 98550, no later than August 20, 2020. Any such proposals shall be subject to the requirements of the proxy rules adopted under the Securities Exchange Act, and as with any shareholder proposal (regardless of whether included in our proxy
materials), our Articles of Incorporation and Bylaws.
Our Articles of Incorporation provide that in order for a shareholder to make nominations for the election of directors or proposals for business to be brought before a meeting,
a shareholder must deliver notice of such nominations and/or proposals to the Corporate Secretary not less than 30 nor more than 60 days prior to the date of the meeting; provided that if less than 31 days’ notice of the meeting is given to
shareholders, such written notice must be delivered not later than the close of the tenth day following the day on which notice of the meeting was mailed to shareholders. We anticipate that, in order to be timely, shareholder nominations or
proposals intended to be made at the annual meeting must be made by December 27, 2019. As specified in the Articles of Incorporation, the notice with respect to nominations for election of directors must set forth certain information regarding each
nominee for election as a director, including the person’s name, age, business address and number of shares of common stock held, a written consent to being named in the Proxy Statement as a nominee and to serving as a director, if elected, and
certain other information regarding the shareholder giving such notice. The notice with respect to business proposals to be brought before the annual meeting must state the shareholder’s name, address and number of shares of common stock held, a
brief discussion of the business to be brought before the annual meeting, the reasons for conducting such business at the meeting, and any interest of the shareholder in the proposal.
Appendix A
Timberland Bancorp, Inc.
2019 Equity Incentive Plan
ARTICLE I
ESTABLISHMENT, PURPOSE AND DURATION
Section 1.1 Establishment of the Plan.
The Company hereby establishes an incentive compensation plan to be known as the “Timberland Bancorp, Inc. 2019 Equity Incentive Plan” (the “Plan”), as set
forth in this document. The Plan permits the granting of Nonqualified Stock Options, Incentive Stock Options and Restricted Stock.
The Plan was originally adopted effective as of November 26, 2019 by the Board, but it will only become effective (the “Effective Date”) when it is
approved by the Company’s shareholders at the annual meeting of the Company’s shareholders on January 28, 2020, or any adjournment or postponement thereof (the “2020 Annual Meeting”). If this Plan is not approved by the Company’s shareholders at
the 2020 Annual Meeting, and in any event when required by Section 10.9, this Plan shall be void.
Provided that the Plan is approved by the shareholders as provided for in this Section 1.1, this Plan shall be treated as a new plan for purposes of
Section 422 of the Code (as herein defined), so that an Option granted hereunder on a date that is not more than ten years after the Plan was adopted by the Board, and that is intended to qualify as an Incentive Stock Option under Section 422 of
the Code, complies with the requirements of Section 422(b)(2) of the Code and the applicable regulations thereunder.
Section 1.2 Purpose of the Plan.
The purpose of the Plan is to promote the success, and enhance the value, of the Company by linking the personal interests of Employees and Directors with
those of Company shareholders. The Plan is further intended to assist the Company in its ability to motivate, attract, and retain the services of Employees and Directors upon whose judgment, interest, and special effort the successful conduct of
its operation largely is dependent.
Section 1.3 Duration of the Plan.
Subject to approval by the shareholders of the Company, the Plan shall commence on the Effective Date, as described in Section 1.1 herein, and shall remain
in effect, subject to the right of the Board to terminate the Plan at any time pursuant to Article IX herein. However, in no event may an Award be granted under the Plan on or after the tenth anniversary of the Effective Date, nor may an Incentive
Stock Option be granted under the Plan on or after the tenth anniversary of the date the Plan was adopted by the Board.
ARTICLE II
DEFINITIONS
The following definitions shall apply for the purposes of this Plan, unless a different meaning is plainly indicated by the context:
Affiliate means any “parent corporation” or “subsidiary corporation” of the Company, as those terms are defined in
Sections 424(e) and (f), respectively, of the Code.
Award means, individually or collectively, a grant under the Plan of Options or Restricted Stock.
Award Agreement means a written instrument evidencing an Award under the Plan and establishing the terms and
conditions thereof.
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Bank means Timberland Bank, the wholly-owned subsidiary of the Company, and any successor thereto.
Beneficiary means the Person designated by a Participant to receive any Shares subject to a Restricted Stock Award
made to such Participant that become distributable, to have the right to exercise any Options granted to such Participant that are exercisable, or to receive any Shares paid out under an Award to such Participant where such payout is made following
the Participant’s death.
Board means the Board of Directors of Timberland Bancorp, Inc. and any successor thereto.
Change in Control means the first to occur of a “change in the ownership of the Company or the Bank,” a “change in
the effective control of the Company or the Bank” or a “change in the ownership of a substantial portion of the Company’s or the Bank’s assets,” as those phrases are determined under Section 409A.
Code means the Internal Revenue Code of 1986, as amended from time to time.
Committee means the Committee described in Article IV.
Company means Timberland Bancorp, Inc., a Washington corporation, and any successor thereto.
Director means any individual who is a member of the Board or the board of directors of an Affiliate or an advisory
or emeritus director of the Company or an Affiliate who is not currently an Employee.
Disability means a total and permanent disability, within the meaning of Section 22(e)(3) of the Code, as
determined by the Committee in good faith, upon receipt of sufficient competent medical advice from one or more individuals, selected by the Committee, who are qualified to give professional medical advice.
Domestic Relations Order means a domestic relations order that satisfies the requirements of Section 414(p)(1)(B)
of the Code, or any successor provision, as if such section applied to the applicable Award.
Employee means a full-time or part-time employee of the Company or an Affiliate. Directors who are not otherwise
employed by the Company or an Affiliate shall not be considered Employees under the Plan.
Exchange Act means the Securities Exchange Act of 1934, as amended.
Exercise Period means the period during which an Option may be exercised.
Exercise Price means the price per Share at which Shares subject to an Option may be purchased upon exercise of the
Option.
Fair Market Value means, with respect to a Share on a specified date:
(a) If the Shares are listed on any U.S. national securities exchange registered
under the Exchange Act (“National Exchange”), the closing sales price for such stock (or the closing bid, if no sales were reported) as reported on that exchange on the applicable date, or if the applicable date is not a trading day, on the trading
day immediately preceding the applicable date;
(b) If the Shares are not listed on a National Exchange but are traded on the
over-the-counter market or other similar system, the mean between the closing bid and the asked price for the Shares at the close of trading in the over-the-counter market or other similar system on the applicable date, or if the applicable date is
not a trading day, on the trading day immediately preceding the applicable date; and
(c) In the absence of such markets for the Shares, the Fair Market Value shall be
determined in good faith by the Committee.
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Notwithstanding anything herein to the contrary, if the Shares are not listed on a National Exchange and are not readily tradable on the over-the-counter
market or if it is determined that the Fair Market Value is not properly reflected by such quotations, Fair Market Value shall be based upon a reasonable valuation method that complies with Section 409A.
Family Member means with respect to any Participant, any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, registered domestic partner (as determined under state law), former spouse, sibling, niece, nephew, mother-in-law, father- in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships,
any person sharing the Participant’s household (other than a tenant or employee), a trust in which these persons have more than fifty percent of the beneficial interest, a foundation in which these persons (or the Participant) control the
management of assets, and any other entity in which these persons (or the Participant) own more than fifty percent of the voting interests.
Incentive Stock Option means a right to purchase Shares that is granted to an Employee that is designated by the
Committee to be an Incentive Stock Option and that satisfies the requirements of Section 422 of the Code.
Involuntary Termination means either (a) the termination of the employment of a Participant by the Company or any
Affiliate without the Participant’s express written consent, or (b) the Participant’s voluntary and complete termination of employment with the Company and all Affiliates following any demotion, loss of title, office or significant authority,
reduction in the Participant’s annual salary, or relocation of the Participant’s principal place of employment more than thirty-five (35) miles from its location immediately prior to a Change in Control. No other voluntary termination by a
Participant shall be considered an Involuntary Termination for purposes of this Plan or any Award granted hereunder.
Non-Qualified Stock Option means a right to purchase Shares that is not an Incentive Stock Option.
Option means either an Incentive Stock Option or a Non-Qualified Stock Option.
Option Award means an award of Options pursuant to Article V.
Option Holder means, at any relevant time with respect to an Option, the person having the right to exercise the
Option.
Participant means any Employee or Director who is selected by the Committee to receive an Award.
Period of Restriction means the period during which the entitlement of a Participant under a Restricted Stock Award
is limited in some way or subject to forfeiture, in whole or in part, based on the passage of time, or upon the occurrence of other events as set forth in that Restricted Stock Award.
Person means an individual, a corporation, a partnership, a limited liability company, an association, a
joint-stock company, a trust, an estate, an unincorporated organization and any other business organization or institution.
Plan means the Timberland Bancorp, Inc. 2019 Equity Incentive Plan, as amended from time to time.
Restricted Stock means an award of Shares subject to a Period of Restriction granted pursuant to Article VI herein.
Restricted Stock Award means an award of Restricted Stock pursuant to Article VI.
Retirement means, subject to the terms of an Award, (i) in the case of an Employee, the termination of a
Participant’s employment with the Company and its Affiliates, other than a Termination for Cause, after the Participant has attained age 65, and (ii) with respect to non-employee Directors, the termination of Service as a Director of the Company
and its Affiliates or any successors thereto after reaching normal retirement age as established by the Company, other than a Termination for Cause.
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Section 409A means Section 409A of the Code and any regulations or guidance of general applicability thereunder.
Service means, unless the Committee provides otherwise in an Award Agreement, employment or service in any capacity
as a Director or Employee of the Company or any Affiliate.
Share means a share of common stock of Timberland Bancorp, Inc.
Termination for Cause means termination of Service upon an intentional failure to perform stated duties, a breach
of a fiduciary duty involving personal dishonesty which results in material loss to the Company or any of its Affiliates or a willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or a final
cease-and-desist order which results in material loss to the Company or one of its Affiliates. No act or failure to act on a Participant’s part shall be considered willful unless done, or omitted to be done, not in good faith and without
reasonable belief that the action or omission was in the best interest of the Company. Notwithstanding the above, if a Participant is subject to a different definition of termination for cause in an employment or severance or similar agreement
with the Company or any Affiliate, such other definition shall control.
Vesting Date means the date or dates on which the grant of an Option is eligible to be exercised, or the date or
dates on which a Restricted Stock Award ceases to be forfeitable (i.e., at the end of a Period of Restriction).
ARTICLE III
AVAILABLE SHARES - ELIGIBILITY - PARTICIPATION
Section 3.1 Shares Available Under the Plan.
Subject to adjustment as provided in Section 9.3, the total number of Shares available for grant under the Plan shall be 350,000 (the “Limit”), of which
300,000 of such Shares are reserved to be awarded to Employees and 50,000 of such Shares are reserved to be awarded to Directors. These Shares may be either authorized but unissued, or Shares that have been reacquired by the Company.
Section 3.2 Maximum Awards.
The maximum aggregate number of Shares that may be issued pursuant to Options that are Incentive Stock Options is 300,000, subject to adjustment as
provided in Section 9.3 herein. Notwithstanding any provision in the Plan to the contrary and subject to adjustment as provided in Section 9.3 herein, the maximum aggregate number of Shares with respect to one or more Awards that may be granted to
any one person during any calendar year shall be 100,000 (or 10,000 in the case of non-employee Directors).
Section 3.3 Computation of Shares Issued.
For purposes of this Article III, Shares shall be considered issued pursuant to the Plan only if actually issued upon the exercise or vesting of an Award
except as set forth below. If any Award granted under the Plan terminates, expires, or lapses or is forfeited for any reason, any Shares subject to such Award shall be available for the future grant of an Award under the Plan. Shares used to pay
the Exercise Price of an Option and Shares used to satisfy tax withholding obligations shall not be available for future Awards under the Plan. To the extent that Shares are delivered pursuant to the exercise of an Option, the number of underlying
Shares as to which the exercise is related shall be counted against the number of Shares available for Awards, as opposed to only counting the Shares issued.
Section 3.4 Eligibility.
Persons eligible to participate in the Plan include all Employees and Directors.
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Section 3.5 Actual Participation.
Subject to the provisions of the Plan, the Committee may, from time to time, select from all Employees and Directors, those to whom Awards shall be granted
and shall determine the nature, type and amount of each Award. No Employee or Director shall be entitled to be granted an Award under the Plan.
ARTICLE IV
ADMINISTRATION
Section 4.1 Committee.
(a) The Plan shall be administered by a
Committee appointed by the Board for that purpose and consisting of not less than two (2) members of the Board. Each member of the Committee shall be an “Outside Director” within the meaning of Section 162(m) of the Code or any successor rule or
regulation, a “Non-Employee Director” within the meaning of Rule 16b-3(b)(3)(i) under the Exchange Act or any successor rule or regulation and an “independent director” under the corporate governance rules and regulations imposing independence
standards on committees performing similar functions promulgated by any national securities exchange or quotation system on which Shares are listed.
(b) The act of a majority of the members
present at a meeting duly called and held shall be the act of the Committee. Any decision or determination reduced to writing and signed by all members shall be as fully effective as if made by unanimous vote at a meeting duly called and held.
(c) The Committee’s decisions and
determinations under the Plan need not be uniform and may be made selectively among Participants, whether or not such Participants are similarly situated.
Section 4.2 Committee Powers.
Subject to the terms and conditions of the Plan and such limitations as may be imposed by the Board, the Committee shall be responsible for the overall management and
administration of the Plan. The Committee shall have full power except as limited by law or by the charter or bylaws of the Company or by resolutions adopted by the Board, and subject to the provisions herein, to determine the size and types of
Awards; to determine the terms and conditions of such Awards in a manner consistent with the Plan; to construe and interpret the Plan and any agreement or instrument entered into under the Plan; to establish, amend, or waive rules and regulations
for the Plan's administration; and (subject to the provisions of Article IX herein) to amend or otherwise modify the Plan or the terms and conditions of any outstanding Award to the extent such terms and conditions are within the discretion of the
Committee as provided in the Plan and, if the Award is subject to Section 409A, does not cause the Plan or the Award to violate Section 409A. Further, the Committee shall make all other determinations which may be necessary or advisable for the
administration of the Plan. As permitted by law, rule, or regulation, the Committee may delegate its authorities as identified hereunder. All decisions, determinations and other actions of the Committee made or taken in accordance with the terms
of the Plan shall be final and conclusive and binding upon all parties having an interest therein.
ARTICLE V
STOCK OPTIONS
Section 5.1 Grant of Options.
(a) Subject to the limitations of the Plan,
the Committee may, in its discretion, grant to a Participant an Option to purchase Shares. An Option must be designated as either an Incentive Stock Option or a Non-Qualified Stock Option at the time of grant and, if not designated as either,
shall be a Non-Qualified Stock Option. Only Employees may receive Incentive Stock Options.
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(b) Any Option granted shall be evidenced by an Award Agreement which shall:
(i) specify the number of Shares covered by the Option;
(v) contain such other terms and conditions not inconsistent with the Plan as the Committee may, in its discretion, prescribe.
No Option terms shall be permitted that would cause the Option to be subject to Section 409A. Any such provision shall be void ab initio.
Section 5.2 Size of Option.
Subject to the restrictions of the Plan, the number of Shares as to which a Participant may be granted Options shall be determined by the Committee, in its
discretion, and set forth in the Award Agreement.
Section 5.3 Exercise Price.
The price per Share at which an Option may be exercised shall be determined by the Committee, in its discretion; provided,
however, that the Exercise Price shall not be less than the Fair Market Value of a Share on the date on which the Option is granted.
Section 5.4 Exercise Period.
The Exercise Period during which an Option may be exercised shall commence on the Vesting Date. It shall expire on the earliest of:
(a) the date specified by the Committee in the Award Agreement;
(b) unless otherwise determined by the Committee and
set forth in the Award Agreement, the last day of the three-month period commencing on the date of the Participant’s termination of Service, other than on account of death, Disability, Retirement or a Termination for Cause;
(c) unless otherwise determined by the Committee and set forth in the Award Agreement, the last day of the one year period commencing on the date
of the Participant’s termination of Service on account of death, Disability or Retirement;
(d) as of the time and on the date of the Participant’s termination of Service due to a Termination for Cause; or
(e) the last day of the ten-year period commencing on the date on which the Option was granted (or a five-year term for Options subject to
Section 5.6(a) hereof).
An Option that remains unexercised at the close of business on the last day of the Exercise Period shall be canceled without consideration at the close of business on that date.
Section 5.5 Vesting Date.
(a) The Vesting Date for each Option Award shall be determined by the Committee and specified in the Award Agreement.
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(b) Unless otherwise determined by the
Committee or specified in the Award Agreement:
(i) if the Participant of an Option Award terminates
Service prior to the Vesting Date for any reason other than death, Disability or a Change in Control, any unvested Option shall be forfeited without consideration; provided, however, that with the exception of a Termination for Cause, the
Committee, in its sole discretion, shall have the right to waive such forfeiture and to immediately make exercisable all or any portion of such Options;
(ii) if the Participant of an Option Award terminates
Service prior to the Vesting Date on account of death or Disability, the Vesting Date shall be accelerated to the date of the Participant’s termination of Service; and
(iii) if a Change in Control occurs prior to the Vesting
Date of an Option Award that is outstanding on the date of the Change in Control, the Vesting Date shall be the earlier of (A) the date of the Participant’s Involuntary Termination, if such Involuntary Termination occurs within the twelve-month
period commencing on the effective date of the Change in Control, or (B) the Vesting Date provided for in Section 5.5(a). Notwithstanding the preceding sentence, if at the effective time of the Change in Control the successor to the Company’s
business and/or assets does not either assume the outstanding Option Award or replace the outstanding Option Award with an award that is determined by the Committee to be at least equivalent in value to such outstanding Option Award on the date of
the Change in Control, then the Vesting Date of such outstanding Option Award shall be accelerated to the effective date of the Change in Control.
Section 5.6 Additional Restrictions on Incentive Stock Options.
An Option designated by the Committee to be an Incentive Stock Option shall be subject to the following provisions:
(a) Notwithstanding any other provision of this Plan to the
contrary, no Participant may receive an Incentive Stock Option under the Plan if such Participant, at the time the Award is granted, owns (after application of the rules contained in Section 424(d) of the Code) stock possessing more than ten (10)
percent of the total combined voting power of all classes of stock of the Company or its Affiliates, unless (i) the option price for such Incentive Stock Option is at least 110 percent of the Fair Market Value of the Shares subject to such
Incentive Stock Option on the date of grant, and (ii) such Option is not exercisable after the date five (5) years from the date such Incentive Stock Option is granted.
(b) Each Participant who receives Shares upon exercise of an
Option that is an Incentive Stock Option shall give the Company prompt notice of any sale of Shares prior to a date which is two years from the date the Option was granted or one year from the date the Option was exercised. Such sale shall
disqualify the Option as an Incentive Stock Option.
(c) The aggregate Fair Market Value (determined with respect to
each Incentive Stock Option at the time such Incentive Stock Option is granted) of the Shares with respect to which Incentive Stock Options are exercisable for the first time by a Participant during any calendar year (taking into account all
Incentive Stock Options granted under this Plan and any other plan of the Company or an Affiliate) shall not exceed $100,000 and the term of the Incentive Stock Option shall not be more than ten years.
(d) Any Option under this Plan which is designated by the
Committee as an Incentive Stock Option but fails, for any reason, to meet the foregoing requirements shall be treated as a Non-Qualified Stock Option.
Section 5.7 Method of Exercise.
(a) Subject to the limitations of the Plan
and the Award Agreement, an Option Holder may, at any time on or after the Vesting Date and during the Exercise Period, exercise his or her right to purchase all or any part of the Shares to which the Option relates; provided, however, that the minimum number of Shares which may be
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purchased at any time shall be 100 or, if less, the total number of Shares relating to the Option which remain un-purchased. An Option Holder shall exercise an Option to
purchase Shares by:
(i) giving written notice to the Committee, in such form and manner as the
Committee may prescribe, of his or her intent to exercise the Option;
(ii) delivering to the Committee full payment for the Shares as to which the Option is to be exercised; and
(iii) satisfying such other conditions as may be prescribed in the Award Agreement.
(b) The Exercise Price of Shares to be
purchased upon exercise of any Option shall be paid in full:
(i) in cash (by certified or bank check or such other instrument as the Company may accept); or
(ii) if and to the extent permitted by the Committee, in the form of Shares already owned by the Option Holder as of the exercise date and having an aggregate Fair Market Value on
the date the Option is exercised equal to the aggregate Exercise Price to be paid; or
(iii) if and to the extent permitted by the Committee, by the Company withholding Shares otherwise issuable upon the exercise having an aggregate Fair Market Value on the date the
Option is exercised equal to the aggregate Exercise Price to be paid; or
(iv) by any combination thereof.
Payment for any Shares to be purchased upon exercise of an Option may also be made by delivering a properly executed exercise notice to the Company,
together with a copy of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan proceeds to pay the purchase price and applicable tax withholding amounts (if any), in which event the Shares acquired shall
be delivered to the broker promptly following receipt of payment.
(c) When the requirements of this Section
have been satisfied, the Committee shall take such action as is necessary to cause the issuance of a stock certificate or cause Shares to be issued by book-entry procedures, in either event evidencing the Option Holder's ownership of such Shares.
The Person exercising the Option shall have no right to vote or to receive dividends, nor have any other rights with respect to the Shares, prior to the date the Shares are transferred to such Person on the stock transfer records of the Company,
and no adjustments shall be made for any dividends or other rights for which the record date is prior to the date as of which the transfer is effected.
Section 5.8 Limitations on Options.
(a) An Option by its terms shall not be
transferable by the Option Holder other than by will or the laws of descent and distribution, or pursuant to the terms of a Domestic Relations Order, and shall be exercisable, during the life of the Option Holder, only by the Option Holder or an
alternate payee designated pursuant to such a Domestic Relations Order (but such transfer shall cause an Incentive Stock Option to become a Non-Qualified Stock Option as of the day of the transfer); provided,
however, that a Participant may, at any time at or after the grant of a Non-Qualified Stock Option under the Plan, apply to the Committee for approval to transfer all or any portion of such Non-Qualified Stock Option which is then
unexercised to such Participant’s Family Member; and provided further, than an Incentive Stock Option may be transferred to a trust if, under Section 671 of the Code and applicable state law, the
Participant is considered the sole beneficial owner of the Incentive Stock Option while it is held by the trust. The Committee may approve or withhold approval of such transfer in its sole and absolute discretion. If such transfer is approved, it
shall be effected by written notice to the Company given in such form and manner as the Committee may prescribe and actually received by the Company prior to the death of the person giving it. Thereafter, the transferee shall have all of the
rights, privileges and obligations which would attach
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thereunder to the Participant. If a privilege of the Option depends on the life, Service or other status of the Participant, such privilege of the Option for the transferee
shall continue to depend upon the life, Service or other status of the Participant. The Committee shall have full and exclusive authority to interpret and apply the provisions of the Plan to transferees to the extent not specifically addressed
herein.
(b) The Company’s obligation to deliver
Shares with respect to an Option shall, if the Committee so requests, be conditioned upon the receipt of a representation as to the investment intention of the Option Holder to whom such Shares are to be delivered, in such form as the Committee
shall determine to be necessary or advisable to comply with the provisions of applicable federal, state or local law. It may be provided that any such representation shall become inoperative upon a registration of the Shares or upon the occurrence
of any other event eliminating the necessity of such representation. The Company shall not be required to deliver any Shares under the Plan prior to:
(i) the admission of such Shares to listing on any stock exchange or trading on
any automated quotation system on which Shares may then be listed or traded; or
(ii) the completion of such registration or other qualification under any state or federal law, rule or regulation as the Committee shall determine to be necessary or advisable.
(c) An Option Holder may designate a
Beneficiary to receive any Options that may be exercised after his or her death. Such designation and any change or revocation of such designation shall be made in writing in the form and manner prescribed by the Committee. In the event that the
designated Beneficiary dies prior to the Option Holder, or in the event that no Beneficiary has been designated, any Options that may be exercised following the Option Holder's death shall be transferred to the Option Holder's estate. If the Option
Holder and his or her Beneficiary shall die in circumstances that cause the Committee, in its discretion, to be uncertain which shall have been the first to die, the Option Holder shall be deemed to have survived the Beneficiary.
Section 5.9 Prohibition Against Option Repricing.
Except as provided in Section 9.3 and notwithstanding any other provision of this Plan, neither the Committee nor the Board shall have the right or
authority following the grant of an Option pursuant to the Plan to amend or modify the Exercise Price of any such Option, or to cancel the Option at a time when the Exercise Price is greater than the Fair Market Value of the Shares in exchange for
another Option or Award.
ARTICLE VI
RESTRICTED STOCK AWARDS
Section 6.1 In General.
(a) Each Restricted Stock Award shall be
evidenced by an Award Agreement which shall specify:
(i) the number of shares of Restricted Stock covered by the Restricted Stock Award;
(ii) the amount, if any, which the Participant shall be required to pay to the Company in consideration for the issuance of such Restricted Stock;
(iii) the date of grant of the Restricted Stock Award;
(iv) the Period of Restriction for the Restricted Stock Award and the performance conditions, if any, which must be satisfied in order for the Vesting Date to occur; and
(v) as to Awards awarding Restricted Stock, the rights of the Participant with respect to dividends, voting rights and other rights and preferences associated with such Shares.
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Restricted Stock Awards may contain such other terms and conditions not inconsistent with the Plan as the Committee may, in its discretion, prescribe.
(b) All Awards consisting of Restricted
Stock shall be in the form of issued and outstanding Shares that shall be registered in the name of the Participant, subject to written transfer restriction instructions issued to the Company’s stock transfer agent, together with an irrevocable
stock power executed by the Participant in favor of and held by the Committee or its designee, pending the vesting or forfeiture of the Restricted Stock Award. The Shares shall at all times prior to the applicable Vesting Date be subject to the
following restriction, communicated in writing to the Company’s stock transfer agent:
These shares of common stock are subject to the terms of an Award Agreement between Timberland Bancorp, Inc. and [Name of Participant]
dated [Award Date] made pursuant to the terms of the Timberland Bancorp, Inc. 2019 Equity Incentive Plan, copies of which are on file at the executive offices of Timberland Bancorp, Inc., and may not be sold, encumbered, hypothecated or otherwise
transferred, except in accordance with the terms of such Plan and Award Agreement.
or such other restrictive communication or legend as the Committee, in its discretion, may specify.
(c) Unless otherwise set forth in the Award
Agreement, a Restricted Stock Award by its terms shall not be transferable by the Participant other than by will or by the laws of descent and distribution, or pursuant to the terms of a Domestic Relations Order; provided,
however, that a Participant may, at any time at or after the grant of a Restricted Stock Award under the Plan, apply to the Committee for approval to transfer all or any portion of such Restricted Stock Award which is then unvested to such
Participant’s Family Member. The Committee may approve or withhold approval of such transfer in its sole and absolute discretion. If such transfer is approved, it shall be effected by written notice to the Company given in such form and manner as
the Committee may prescribe and actually received by the Company prior to the death of the person giving it. Thereafter, the transferee shall have, with respect to such Restricted Stock Award, all of the rights, privileges and obligations which
would attach thereunder to the Participant. If a privilege of the Restricted Stock Award depends on the life, Service or other status of the Participant, such privilege of the Restricted Stock Award for the transferee shall continue to depend upon
the life, Service or other status of the Participant. The Committee shall have full and exclusive authority to interpret and apply the provisions of the Plan to transferees to the extent not specifically addressed herein.
Section 6.2 Vesting Date.
(a) The Period of Restriction and Vesting
Date for each Restricted Stock Award shall be determined by the Committee and specified in the Award Agreement.
(b) Unless otherwise determined by the
Committee or specified in the Award Agreement:
(i) if the Participant of a Restricted Stock Award
terminates Service prior to the Vesting Date for any reason other than death, Disability or a Change in Control, any unvested Restricted Stock shall be forfeited without consideration; provided, however, that
with the exception of a Termination for Cause, the Committee, in its sole discretion, shall have the right to reduce or eliminate the Period of Restriction with respect to Restricted Stock following termination of Service for any reason, upon such
terms and provisions as it deems proper;
(ii) if the Participant of a Restricted Stock Award terminates Service prior to the Vesting Date on account of death or Disability, the Vesting Date shall be
accelerated to the date of termination of the Participant’s Service with the Company; and
(iii) if a Change in Control occurs prior to the Vesting Date of a Restricted Stock Award that is outstanding on the date of the Change in Control, the Vesting
Date shall be the earlier of (A) the date of the Participant’s Involuntary Termination, if such Involuntary Termination occurs within the twelve-month period
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commencing on the effective date of the Change in Control, or (B) the Vesting Date provided for in Section 6.2(a). Notwithstanding the preceding sentence, if at the effective time of the Change in Control the
successor to the Company’s business and/or assets does not either assume the outstanding Restricted Stock Award or replace the outstanding Restricted Stock Award with an award that is determined by the Committee to be at least equivalent in value
to such outstanding Restricted Stock Award on the date of the Change in Control, then the Vesting Date of such outstanding Restricted Stock Award shall be accelerated to the earliest date of the Change in Control.
Section 6.3 Dividend Rights.
Any dividends or distributions (collectively referred to herein as “Dividends”) declared and paid with respect to Shares subject to a Restricted Stock
Award, whether or not in cash, shall be held by the Company on behalf of the Participant. If the Participant becomes vested in his Shares that are subject to the Restricted Stock Award, then the Company shall pay the Dividends related to those
Shares to the Participant or his Beneficiary in a lump sum, without interest, no later than thirty (30) days following the Vesting Date of those Shares. The Participant and his Beneficiaries heirs, successors or assigns shall have no legal or
equitable rights, interests or claims in any property or assets of the Company or an Affiliate with respect to held Dividends, and such Dividends shall, until paid, remain general, unpledged and unrestricted assets of the Company. The Company’s
obligation under the Plan with respect to held Dividends shall be merely of an unfunded and unsecured promise to pay money in the future.
Section 6.4 Voting Rights.
Unless otherwise specified in the Award Agreement, a Participant who is awarded Shares of Restricted Stock hereunder may exercise full voting rights with
respect to those Shares, including during the Period of Restriction.
Section 6.5 Designation of Beneficiary.
A Participant who has received a Restricted Stock Award may designate a Beneficiary to receive any unvested Restricted Stock. Such designation (and any
change or revocation of such designation) shall be made in writing in the form and manner prescribed by the Committee. In the event that the Beneficiary designated by a Participant dies prior to the Participant, or in the event that no Beneficiary
has been designated, any vested Shares that become available for distribution on the Participant’s death shall be paid to the executor or administrator of the Participant’s estate.
Section 6.6 Manner of Distribution of Awards.
The Company's obligation to deliver Shares with respect to a Restricted Stock Award shall, if the Committee so requests, be conditioned upon the receipt of
a representation as to the investment intention of the Participant or Beneficiary to whom such Shares are to be delivered, in such form as the Committee shall determine to be necessary or advisable to comply with the provisions of applicable
federal, state or local law. It may be provided that any such representation shall become inoperative upon a registration of the Shares or upon the occurrence of any other event eliminating the necessity of such representation. The Company shall
not be required to deliver any Shares under the Plan prior to (i) the admission of such Shares to listing on any stock exchange or trading on any automated quotation system on which Shares may then be listed or traded, or (ii) the completion of
such registration or other qualification under any state or federal law, rule or regulation as the Committee shall determine to be necessary or advisable.
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ARTICLE VII
[RESERVED]
ARTICLE VIII
ADDITIONAL TAX PROVISION
Section 8.1 Tax Withholding Rights.
The Company shall have the power and the right to deduct or withhold, or require a Person to remit to the Company, an amount sufficient to satisfy federal,
state and local taxes (including the Participant’s FICA obligation) required by law to be withheld with respect to any grant, exercise or payment made under or as a result of the Plan. In this regard, where any Person is entitled to receive
Shares, the Company shall have the right to require such Person to pay to the Company the amount of any tax which the Company is required to withhold with respect to such Shares, or, in lieu thereof, to retain, or to sell without notice, a
sufficient number of Shares to cover the minimum amount required to be withheld.
ARTICLE IX
AMENDMENT AND TERMINATION
Section 9.1 Termination
The Board may suspend or terminate the Plan in whole or in part at any time prior to the tenth anniversary of the Effective Date by giving written notice
of such suspension or termination to the Committee. Unless sooner terminated, the Plan shall terminate automatically on the tenth anniversary of the Effective Date. In the event of any suspension or termination of the Plan, all Awards previously
granted under the Plan that are outstanding on the date of such suspension or termination of the Plan shall remain outstanding and exercisable for the period and on the terms and conditions set forth in the Award Agreements evidencing such Awards.
Section 9.2 Amendment.
The Board may amend or revise the Plan in whole or in part at any time; provided, however, that, to the extent
required to comply with Section 162(m) of the Code or the corporate governance standards imposed under the listing or trading requirements imposed by any national securities exchange or automated quotation system on which the Company lists or seeks
to list or trade Shares, no such amendment or revision shall be effective if it amends a material term of the Plan unless approved by the holders of a majority of the votes cast on a proposal to approve such amendment or revision.
Section 9.3 Adjustments Upon the Occurrence of Certain
Events.
In the event any recapitalization, forward or reverse split, reorganization, merger, consolidation, spin-off, combination, exchange of Shares or other
securities, stock dividend or other special and nonrecurring dividend or distribution (whether in the form of cash, securities or other property), liquidation, dissolution, or other similar corporate transaction or event affects the Shares such
that an adjustment is appropriate in order to prevent dilution or enlargement of the rights of Participants under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of:
(i) the number and kind of securities deemed to be available thereafter for grants of
Awards in the aggregate to all Participants and the individual and group share limits;
(ii) the number and kind of securities that may be delivered or deliverable in respect of outstanding Awards; and
(iii) the Exercise Price of Options.
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In addition, the Committee is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards (including, without
limitation, cancellation of Awards in exchange for the in-the-money value, if any, of the vested portion thereof, or substitution of Awards using stock of a successor or other entity) in recognition of unusual or nonrecurring events (including,
without limitation, events described in the preceding sentence) affecting the Company or any Affiliate or the financial statements of the Company or any Affiliate, or in response to changes in applicable laws, regulations, or accounting principles.
ARTICLE X
MISCELLANEOUS
Section 10.1 Status as an Employee Benefit Plan.
This Plan is not intended to satisfy the requirements for qualification under Section 401(a) of the Code or to satisfy the definitional requirements for an
“employee benefit plan” under Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended. It is intended to be a non-qualified incentive compensation program that is exempt from the regulatory requirements of the Employee
Retirement Income Security Act of 1974, as amended. The Plan shall be construed and administered so as to effectuate this intent.
Section 10.2 No Right to Continued Service.
Neither the establishment of the Plan nor any provisions of the Plan nor any action of the Board or Committee with respect to the Plan shall be held or
construed to confer upon any Participant any right to a continuation of his or her position as an Employee or a Director. The Company reserves the right to remove any participating member of the Board or dismiss any Participant or otherwise deal
with any Participant to the same extent as though the Plan had not been adopted.
Section 10.3 Construction of Language.
Whenever appropriate in the Plan, words used in the singular may be read in the plural, words used in the plural may be read in the singular, and words importing the masculine
gender may be read as referring equally to the feminine or the neuter. Any reference to an Article or Section number shall refer to an Article or Section of this Plan unless otherwise indicated.
Section 10.4 Severability.
In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the
Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
Section 10.5 Governing Law.
The Plan shall be construed, administered and enforced according to the laws of the State of Washington without giving effect to the conflict of laws
principles thereof. The federal and state courts located in the county or contiguous counties in which the Company’s headquarters are located shall have exclusive jurisdiction over any claim, action, complaint or lawsuit brought under the terms of
the Plan. By accepting any Award granted under this Plan, the Participant, and any other person claiming any rights under the Plan, agrees to submit himself, and any such legal action as he shall bring under the Plan, to the sole jurisdiction of
such courts for the adjudication and resolution of any such disputes.
Section 10.6 Headings.
The headings of Articles and Sections are included solely for convenience of reference. If there is any conflict between such headings and the text of the
Plan, the text shall control.
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Section 10.7 Non-Alienation of Benefits.
The right to receive a benefit under the Plan shall not be subject in any manner to anticipation, alienation or assignment, nor shall such right be liable
for or subject to debts, contracts, liabilities, engagements or torts.
Section 10.8 Notices.
Any communication required or permitted to be given under the Plan, including any notice, direction, designation, comment, instruction, objection or
waiver, shall be in writing and shall be deemed to have been given at such time as it is delivered personally or three (3) days after mailing if mailed, postage prepaid, by registered or certified mail, return receipt requested, addressed to such
party at the address listed below, or at such other address as one such party may by written notice specify to the other party:
(a) If to the Committee:
Timberland Bancorp, Inc.
624 Simpson Avenue
Hoquiam, Washington 98550
Attention: Corporate Secretary
(b) If to a Participant, to such person’s address as shown in the Company’s records.
Section 10.9 Approval of Shareholders.
The Plan shall be subject to approval by the Company’s shareholders within twelve (12) months before or after the date the Board adopts the Plan.
Section 10.10 Clawback.
All Awards (whether vested or unvested) shall be subject to such clawback (recovery) as may be required to be made pursuant to law, rule, regulation or
stock exchange listing requirement or any policy of the Company adopted pursuant to any such law, rule, regulation or stock exchange listing requirement.
Section 10.11 Section 409A; Responsibility for Tax Treatment.
It is intended that the Awards provided under the Plan be exempt from the application of Section 409A. The Plan and all Award Agreements shall be
construed in a manner that effects such intent. In addition, the tax treatment of the benefits provided under the Plan or any Award is not warranted or guaranteed. Neither the Company, its Affiliates nor their respective directors, officers,
employees or advisers (other than in their individual capacity as a Participant) shall be held liable for any taxes, interest, penalties or other monetary amounts owed by any Participant or other taxpayer as a result of the Plan or any Award.
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TIMBERLAND BANCORP, INC.
ATTN: DEAN J. BRYDON
624 SIMPSON AVENUE
HOQUIAM, WA 98550
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VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery
of information up until 11:59 p.m. Eastern Time on January 27, 2020. Have your
proxy card in hand when you access the website and follow the instructions to
obtain your records and to create an electronic voting instruction form.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until
11:59 p.m. Eastern Time on January 27, 2020. Have your proxy card in hand
when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid
envelope we have provided or return it to Vote Processing, c/o Broadridge,
51 Mercedes Way, Edgewood, NY 11717.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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TIMBERLAND BANCORP, INC.
The Board of Directors recommends a vote "For All"
the following nominees listed below for a:
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For
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Withhold
All
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For All
Execpt
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To withhold authority to vote for any individual
nominee(s), mark "For All Except" and write the number(s)
of the nominee(s) on the line below.
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1. Election of Directors
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Nominees:
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Two-year Term:
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01) Michael R. Sand
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Three-year Term:
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02) Jon C. Parker
03) Michael J. Stoney
04) Daniel D. Yerrington
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The Board of Directors recommends you vote "FOR" proposal 2
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Abstain
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2. Advisory (non-binding) approval of the compensation of our named executive officers as disclosed in the proxy statement.
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The Board of Directors recommends a vote "FOR" for proposal 3.
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For
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Abstain
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3. Advisory of the adoption of the Timberland Bancorp, Inc. 2019 Equity Incentive Plan.
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The Board of Directors recommends a vote "FOR" propsoal 4.
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Abstain
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4. Ratification of the Audit Committee's selection of Delap LLP as our independent registered public accounting firm for the year ending
September 30, 2020.
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NOTE: In their discretion, upon such other matters as may properly come before the meeting.
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Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor,
administrator, or other fiduciary capacity, please give your full title. If shares are held jointly,
each holder should sign. All holders must sign. If a corporation or partnership, please sign in
full corporate or partnership name by authorized officer.
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Signature [PLEASE SIGN WITHIN BOX]
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Signature (Joint Owners)
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice, Proxy Statement and the 2019 Annual Report to Shareholders are
available at https://materials.proxyvote.com/887098
REVOCABLE PROXY
TIMBERLAND BANCORP, INC.
Annual Meeting of Shareholders
January 28, 2020 at 1:00 PM, local time
This proxy is solicited by the Board of Directors
The undersigned hereby appoints the official Proxy Committee of the Board of Directors of Timberland Bancorp, Inc. ("Timberland") with full powers of substitution, as attorneys and proxies for the undersigned,
to vote all shares of common stock of Timberland which the undersigned is entitled to vote at the Annual Meeting of Shareholders, to be held at the Hoquiam Grand Central, 427 7th Street, Hoquiam, Washington 98550, on Tuesday, January 28, 2020
at 1:00 p.m., local time, and at any and all adjournments thereof, as indicated.
The undersigned acknowledges receipt from Timberland prior to the execution of this proxy of the Notice of Annual Meeting of Shareholders, a Proxy Statement dated December
18, 2019, and the 2019 Annual Report to Shareholders.
This proxy, will be voted as directed, but if no instructions are specified, this proxy will be voted FOR all the nominees listed, FOR proposal 2, FOR proposal 3 and FOR proposal 4. If any
other business is presented at the annual meeting, this proxy will be voted by those named in this proxy in their best judgment. At the present time, the Board of Directors knows of no other business to be presented at the meeting. This proxy
also confers discretionary authority on the Proxy Committee to vote with respect to the election of any person as director where the nominees are unable to serve or for good cause will not serve and matters incident to the conduct of the
annual meeting.
Should the undersigned be present and elect to vote at the annual meeting or at any adjournment thereof and after notification to the Corporate Secretary of Timberland at the meeting of the shareholder's
decision to terminate this proxy, then the power of said attorneys and proxies shall be deemed terminated and of no further force and effect.
Please complete, date, sign and mail this proxy promptly in the enclosed postage-prepaid envelope. You may also vote by telephone or the Internet by following the instructions on the reverse side.
Continued and to be signed on reverse side